Costco announces online grocery delivery pilot project

Consumer research expert predicts online grocery delivery from Costco arriving in Alberta soon

Consumer expert says it won't be long before it comes to Alberta

Costco is launching an online grocery delivery service in southern Ontario (Dan Zakreski/CBC)

Costco is getting into the online grocery delivery business, but Calgarians shouldn't trade in their SUV for an online account just yet.

The retail giant announced a pilot project featuring online grocery delivery in parts of southern Ontario this week — and it won't be long before they offer the same thing in Alberta, said a consumer research expert.

"They're starting in one region, of one province, and they're going to work their way out," said  Jim Danahy, the head of CustomerLab, a consumer research firm, in an interview on the Calgary Eyeopener.

"They're following the developments that they and others have done in the U.S. so they don't stumble. At least at the beginning, there's no fresh foods — it's all shelf stable or refrigerated.

"It is catch up … they have to catch up to their competitors."

Online giants

Those competitors includes, North America's most popular online shopping destination — which somewhat counter intuitively is opening actual stores.

"Amazon bought Whole Foods, and make no mistake, there's more of that is coming," Danahy said.

"Walmart is the second biggest online retailer in the world, so if you don't want to go to their stores, that's already coming: you can click and collect with many of their stores already," he added.

Online grocery delivery is available at Superstores, and Sobey's/Safeway have entered into an arrangement with a large online retailer in the United Kingdom, which Danahy said has the most highly developed online shopping of anyone.

"If you want be in the shopping game, you have to give people all the choices," said Danahy.

Jim Danahy, the head of CustomerLab, a Toronto consumer research firm. (CustomerLab)

Curbing the impulse buy

What online shoppers are less inclined to do than real ones is wander off to a section of the digital grocery store and buy something completely unexpectedly — which frequently results in people spending more than originally intended.

"That's the concept of discovery," Danahy said.

"A whole lot of items are quite deliberately cycled through Costcos so that you find something new each time — and if you're not there, you don't know [about them]."

While online shopping may cut into the impulse buy, Danahy said online retailers have ways of compensating for that.

"There might be a little bit less of the discovery but that's because instead of having about 3500 items in each Costco store, they're going to have about 19,000 items available online."

The end of the store?

Despite the popularity of online shopping, Danahy said he doesn't see the end of stores happening anytime soon.

"Shopping is recreation for many people," he said.

"It's a creative activity that involves more than one retailer, and food, and an outing.

"There's shopping tourism, particularly for people who live in places like Vancouver and Toronto and Southern Quebec and New Brunswick, where people go across the United States border in both directions on shopping vacations for the day," he added.

"There will always be a role for physical retail experiences — and we will choose those the same way we decide whether we want to dine in a restaurant or take delivery."

With files from the Calgary Eyeopener


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